Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
As Bitcoin’s price recovered from its fall under $30,000, the Cardano market rallied too. Taking into account the crypto’s recent fall and recovery on the charts, ADA remained volatile too, especially since ADA’s price had dropped by 50% since its peak in May. At the time of writing, the digital asset was trading at $1.16 with a market capitalization of $37.57 billion.
Now, recent recoveries underlined the buying pressure in the market. However, will it be sustained?
Cardano [ADA] 12-hour chart
Source: ADAUSD on TradingView
The attached 12-hour chart for ADA noted its price fall within a descending channel and breakdown to $1.01. However, the price soon managed to hold itself above the $1 price level. At press time, ADA was trading at a crucial level and if the buyers offer support, the price could move to test the resistance level at $1.29, otherwise, the price might dip to $1.08 and consolidate.
Reasoning
These two scenarios were possible as the press time price level was receiving support from the market’s traders. The Visible Range highlighted a rising histogram at the same, despite the Point of Control [Red line] remaining high at $1.34. What’s more, due to the recent surge in price, bearishness had certainly reduced and could result in a trend reversal.
The Relative Strength Index affirmed this rise in buying pressure. The RSI dropped into the oversold zone when the price crumbled, however, the following recovery brought enough buying pressure to push the asset towards equilibrium. At the time of writing, ADA remained close to equilibrium, with the RSI moving sideways at 43.
Even so, the larger market bearishness remained. The sell-off triggered by the falling price of ADA gave way to more southbound market pressure. The -DI remained above the +DI, however, the recovery reduced the gap between the two lines. Finally, the Directional Movement Index highlighted that the downwards pressure was high.
Conclusion
The ongoing Cardano market is at an inflection point. The recent recovery in the altcoin’s value pushed the price higher and it can be sustained only with traders’ support. However, with bearishness largely dominant in the market, ADA could lose the support at $1.16 and drop to $1.08 and consolidate.
